List Of Licences Required To Start A Business In Kenya, Their Costs

• Starting a business in Kenya is not for the faint-hearted, as research shows over 70% of startups fail to celebrate their third anniversary
• Depending on the type of business, a registration certificate can either be as a sole proprietorship or a company
• After registration, firms must obtain registration with the National Social Security Fund (NSSF), and National Hospital Insurance Fund (NHIF)

Some of the billionaires we see in Kenya built their empires from scratch.

They established companies and, through determination and perseverance, made it to the top.

Starting a business in Kenya is not for the faint-hearted, as research shows over 70% of startups fail to celebrate their third anniversary.

Data by the Registrar of Companies indicated that 2,540 entities were closed in 2021, 1255 more than in 2020.

What are requirements for starting business in Kenya?

1. Registration certificate/Certificate of incorporation

Depending on the type of business, a registration certificate can either be as a sole proprietorship or a company.

For companies, it is identified as the company registration certificate, while individuals acquire the business name registration certificate.

According to Ken Invest, the Registrar of Companies is responsible for business registrations in Kenya.

"All company and business registrations (sole proprietorship and partnerships) are being done through the ecitizen online platform but for limited liability partnerships (LLPs) registrations which are still manual and are being done at the company registry," Ken Invest noted.

Registration costs KSh 10,000 for all companies and can be done online by dialling *271# on a Safaricom mobile phone.

2. NSSF and NHIF

After registration, firms must obtain registration with the National Social Security Fund (NSSF), and National Hospital Insurance Fund (NHIF).

There are several ways to register for NHIF. One can register online using the NHIF Selfcare Platform and follow the steps outlined in the platform or dial the USSD code *155# from any network and follow the prompts.

The payment for the first registration is KSh 1,500, which will cover one for three months. Afterwards, one is required to pay KSh 500 monthly to avoid penalties.

On the other hand, registration for NSSF costs KSh 200.

3. KRA PIN

The Kenya Revenue Authority (KRA) PIN registration for companies and partnerships is initiated online via iTax.

Steps:

• Visit iTax.
• Select "New PIN Registration".
• Fill out the online form appropriately.
• Upload relevant documents (business registration certificate details, PINs of the company directors and the National IDs)
• Submit the online application.

You will receive an acknowledgement receipt on completion of the online application.

4. Business permit

One must then acquire a business permit indicating they are licensed to operate.

License fees vary from county to county.

According to Kenya Invest, it costs KSh 15,000 in Nairobi to acquire a permit, while the same costs KSh 3,500 in Isiolo.

There are regulatory licences depending on the type of business. For example, operating a hotel, bakery, supermarket or food-related school needs a food and health license.

A fire prevention and safety certificate costs an average of KSh 3,000, but the fee depends on the county.

What are profitable businesses to start?

With the high unemployment rate, some Kenyans are establishing businesses to make ends meet.

The mitumba business is a lucrative venture in Kenya as the demand for second-hand clothes is high among the population.

Jane Korir, who operates a mitumba shop in Kapsabet town, told TUKO.co.ke she started her mitumba business with KSh 17,000 borrowed from her father.

"I make close to KSh 100,000 in a good month. The business enabled me to open a salon which employed four people," she said.

Farming is another profitable business that can be started with KSh 20,000 if one does not have to lease land.